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Quad-Witching Thriller: Oil, S&P, Nasdaq Soar As Bond Yields, Dollar Tumble On Economic Gloom
The only asset class that made any sense in today's quad-witching was the 10 Year, whose yield did precisely what it should do in a world in which the Fed slashed the economic outlook 2 days ago: it tumbled.
The 10Y is almost back to the "kneejerk" shock levels following Yellen's dramatic slashing of the Fed's economic forecasts (which anyone who reads Zero Hedge could have foreseen, see from March 3: GDP Shocker: Atlanta Fed Calculates Q1 Growth Of Only 1.2%)
Everything else was just algorithmic momentum-ignition, stop hunts, spoofing, and the other usual quad-witching drama which we said would happen first thing this morning.
It started with a tremendous move higher in oil, where momentum ignition was tripped in an attempt to slam the stops to the upside:
This means that in the week in which both the API and EIA reported gargantuan oil builds, and the topic of the US running out of oil storage is becoming a very urgent one, oil is closing the week... higher.
The catalyst for today's massive move which also sent the Nasdaq well over 5,000 and just why of its all time closing high record last in the year 2000...
... was likely the dramatic move in the EURUSD, and the USD in general,which once again saw a dramatic move higher and touched on the level which caused the USD flash crash on Wednesday.
And then there was the usual algo manipulation, which saw a flash smash in the VXX...
... reacting to some just as arcane moves in the VIX:
As usual, Nanex' Eric Hunsader summarized the issue of market integrity best:
Hundreds of instant big moves in stocks at 15:45 and 15:50 (as expected from imbalance info on Witching day).
— Eric Scott Hunsader (@nanexllc) March 20, 2015
The question is, what stocks didn't have a mini flash crash today?
— Eric Scott Hunsader (@nanexllc) March 20, 2015
As for that one key variable that used to matter once upon a time, fundamentals, and the actual underlying economy, stick a fork in it.
So as long as nothing makes sense, and as long as bad news is terrific even for those hedge fund managers who have admitted it will all end in revolution or war, may as well grab a beer, some popcorn and enjoy it. We all know how this story ends.
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The worst since Lehman?
There is an direct, inverse relationship between ZH doom articles (intensity & frequency) and the major "stawk"market indices.
Kevin Henry reads ZH religiously, and jumps on his Bloomberg the moment 'reads' breach 20k on any bearish story. wouldn't surprise me if Yellen, Fischer, and Dudley were regular readers, too.
and i thought quad-witching was harry potters sport
thx for correcting the Vix, VXX ... previous doom post seemed like smash VXX to smash Vix, nonsensical
Heh. Bullish.
"Algo-Finger" by Neil Young
Look out Mama, there’s an algo comin’ up the river
With a big bull flag and a candle with a mile-long tail
I think we’d better move our stops
Cuz it don’t look like it’s here to deliver the mail
It’s a millisecond away, I hope it’s not here to stay
It’s got “Goldman” on the side, high volume
and it’s making big waves
The SEC’s AWOL, and Yellen’s huntin’ bear in the mountains
My boss’s been drinkin’ since May 6, 2010
So the powers that be left me here to do the trading
And I just turned twenty-two, I have no idea what to do
The more I lost, the more those feelings grew
Logitech mouse in my right hand felt reassuring
They told me Green means Run, son, Fibonacci adds up to nothin’
But when the first spike hit the tape, I never saw it comin’
Raised ‘The Finger’ to the sky, never stopped to wonder why
Then I saw black and my account balance went bye-bye
Avenge me against the algo market-riggers
Sons-of-guns that hit my buy-stop trigger
Just think of David & Goliath, reconfigured
Where fierce Attila the Hun crushes Homer Simpson’s son
Then runs him up a pole near Constantinople
Monday will be fun
As fun as any other Monday, up 0.23% to end the day up 0.33%?
Some kind of weird bull trap.
Yellen decided to kill several obvious bear signals, but I don't believe that equities are going to the moon, she's just fine-tuning the next few months until she boosts rates and we see what happens.
i like Gold...
Gotta love that jargon - "algorithmic momentum ignition" etc. Can compete with the commentators on a Texas holdem tournament ("check raised a nut flush on the turn..." "all in on a busted straight"..etc..)
Missed vapor ramp though.
Nice round trip there in F/X. The euro traders got washed on the heavy cycle, and hit the spin cycle x2. lol
I can't believe that the market is trading this pscycho over 25 bp and lift off.
I'm IN for 'Black Monday".
Anyone else?
I'll probably get creamed again, but what the hell, someday, I'll get it right.
Could be some of the evil-doers will push it another week to quarter-end, so depending on what you do timing might bite your presidential behind.
Maybe stocks can now only go up if bond prices go up, too!
Super moon, solar eclipse, spring equinox, quad/ penta witch. BREAK OUT THE BUSHMILL'S AND JAMESON.
Wtiches you say?
Someone has to start asking why the EIA numbers (which are estimates) are so far away from the actual production numbers reported by North Dakota and Texas in January. If what those states have reported is correct, production isn't continuing to surge. Which begs the next question, is storage actually as full as we're being told?
http://peakoilbarrel.com/texas-rrc-report-and-other-news/
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